Are Shoppers Turning Away From Expensive Jewelry?

Slate’s advice columnist, Dear Prudence, recently fielded thefollowing question from a woman who was embarrassed by the engagement ring bought by her fiancé:

The diamond is so big, and the setting so flashy, it’s completely unlike the kind of rings most of my friends got….I’ve gotten so much unwanted attention, with people asking to see “the rock” and calling me celebrity nicknames. My mom has used every synonym for tacky in the book, and friends have asked if I know whether or not it’s a blood diamond. It’s humiliating.

My fiancé is so proud that he was able to get me such a nice ring since he comes from a working-class background. I just don’t know how to tell him that I want him to take it back and get a semi-precious stone or something more to my taste…

For many in the industry, this comment seems absurd. Who complains about jewelry being too big?

But societal tastes are changing. To many, flashy has become synonymous with excessive, and wasteful.

This brings to mind a recent Facebook thread on the industry’s woes. On it, Patrick Slavenburg, the chief commercial officer of Farlang.com, said he’s noticed a sea change in consumer attitudes.

“When we interviewed Gen X women in 2006 before launching Farlang the most frequent comment was: ‘Why buy expensive jewelry when so much great looking cheap jewelry is available?’” he said.

He recently questioned an affluent jewelry-loving friend about what she considered a reasonable price point for jewelry.

“For something nonessential like jewelry, probably $200,” she replied. “More than that, I would have to really love it. And give it lots of consideration.”

This doesn’t mean that the market for fine jewelry is dead, of course. Many stores still sell plenty of high-end watches and diamonds. There are many jewelry markets; there always have been.

But we are seeing something of a societal shift. America has become more casual. More offices have adoptedinformal dress codes; $5,000 jewelry doesn’t always fit with jeans and a sweater. Marc Zuckerberg is considered the epitome of the dot-com billionaire. And what is he known for wearing? A hoodie.

“We all have an increasingly casual lifestyle,” noted industry analyst and editor of the Centurion newsletter Hedda Schupak on the same Facebook thread. “It’s hard to sell a lot of heavy gemstone pieces to customers that wear Lululemon most of the time, and they can’t justify the cost for something they might wear a few times a year.”

Which brings up the cost issue. American consumers are squeezed these days; they have been since the recession. Not that many have the ability to buy a $3,000 piece on a whim.

“The designers we support are amazingly creative and talented,” says Slavenburg. “[They] make masterpieces. But the price points are not affordable outside the one percent.”

A recent survey by Cashelorette found that most millennials only wanted to spend one month’s salary on an engagement ring.

“Older millennials could still be saddled with student loan debt, and many are trying to save for a down payment on a house,” the site’s Sarah Berger told CNBC, adding those most millennials prefer spending on experiences, rather than things.

On top of this, the industry hasn’t always made the case for why its products cost so much. And now that shoppers have the ability to buy virtually anything, it’s not surprising that some will opt for the cheaper alternative.

“There still room for jewelry,” says Slavenburg, “but it’s ‘great, original design’ for up to $300, $400 retail.”

So it’s quite likely we will see a continuing shift towards affordable product. In some ways, this has already happened: The most successful jewelry brands of the last ten years are Pandora, Alex and Ani, and now, Kendra Scott.

But this won’t be easy. Jewelry has always been low-turn but high-profit. Selling cheaper items—even lots of low-end items—won’t always support high retail rents.

Still, this seems to be where the market is going. As one New England jeweler lamented on the Facebook thread:

People around here just don’t really like jewelry that much anymore. I find that I have to ambush people at unlikely events with jewelry that easily translates into a tangible meaning for them, is made of sterling, and is handmade. And costs less than $100.00.

This will only get worse as the current generational wave continues. The concept of spending one week’s pay in a piece of jewelry is ridiculous to anyone under 30.

JCK News Director

August 4, 2017

Jes E

While the price of Everything has gone up considerably, look at gas, and all your basics,(im in California, yes pity for me) there is the silent majority that still buys high end jewelry. the fact that we now have this mind set that all wealth is shared or the “You have to much, you need to give me some attitude” has made some consumers a bit gun shy and not showing off their jewelry, they still buy. Your not going to keep the lights on selling 3-400.00 items. Important jewelry is still purchased. I really wish JCK would stop trying to brainwash retailers on this down spiral of the industry. Jewelry is art and creativity, there is a market for every piece. Retailers have to get off their tush and start to market themselves as a constant. If your going to complain about business, your not doing your share of keeping your business going.

Arthur Klein

Well said.

Lourdes Valles

100% agree with you.

Paul

As and AGTA member, I agree with Jes. The foot traffic in most stores is not strong enough to support $300 items. In fact I am seeing where quality is still selling and this is what is keeping many stores open.

There are also many engagement rings being purchased with sapphires, rubies, zircons and other stones which are a bit more affordable than a diamond, as well as a better margin for the jeweler.

The challenge for most of my clients is the lack of and knowledge of marketing in this day and age. If they are not doing the basic in social media, they are challenged to find new clients. The cycle has swung, it reminds me of the early 80’s when custom was the bread winner, and the boomers were just starting to purchase jewelry. The major difference? The interest rates were at all time times when we bought homes. So when the rates went down, people pulled money out of their homes for toys and to play. That will never happen for the future generations.

You make a lot of great points, especially about jewelers and designers getting of our “tushes” and getting creative with their marketing. While at JCK I asked everyone how business is and it is a totally mixed bag! The jewelers who are doing things different and really focusing on romancing special pieces, fresh designers…one of a kinds, one on one networking, hosting top notch events are doing relatively well. This type of store is very hands on and they are creating a “true experience”. I will never forget meeting this energetic group of ladies I spoke to in the shuttle going from JCK back to Couture. Their store is in a part of Texas that I haven’t heard of and it is away from the major metropolitan areas and they were citing some of the most avant garde / edgy designers as some of their very best sellers. Their passion for these designs was amazing and that is what makes them successful.

On the flip side, I talk to a few other stores and vendors that complained about all of the things that are in the article above. Millennials and the internet were the most frequently cited issues and those stores weren’t too optimistic at all. In any business you have to make your own success. Long gone are the days of build it and they will come. If you are selling things that look like “everyone else” and “everyone else” is better at e-commerce than you, you have a big problem.

kels

This country glorifies wealth. Ever spend some time on Instagram? Plenty
of rich kids flashing big bling. So what if Zuckerberg wears a hoodie.
His wife Priscilla wears a pretty nice ruby and diamond engagement ring.
No she’s not wearing some 5 carat diamond, but she’s still wearing very
fine jewelry (rubies like that aren’t cheap), hoodie wearing husband
and all. I serve many customers in the Bay Area where that couple lives,
and there is no shying away from conspicuous consumption in the way
this article describes, not with my business anyway. The last few
engagement rings we made for customers were all in the 2.5 carat plus
range. If shoppers like that anonymous “Dear Prudence” person are the
norm, then JCK better start writing about Walmart jewelry with
regularity. Or is JCK simply trying to bring quality jewelers, you know,
your readers? Down. Because that’s the result.

David C

There is a strong segment of the population (even current rising generation) that still have an appreciation for art, beauty, and fine quality. I think more appreciation is necessary, but I certainly think the market is very strong-diamonds are extremely liquid in the categories that are selling. The rising middle class, true middle class, upper middle class, and upper class-sales are very strong. The lower middle class and lower is what we’re talking about here, and that’s a function of our bubble economy imploding.

Vickie Zisman

the article is good, but too simplistic and narrow. There can be good tasteful jewellery , good quality stones, but NOT tacky. There are independent designers or vintage jewellery shops that sell beautiful pieces. They are not cheap, but they aesthetically pleasing and good value. Big does not always equal quality and taste. One can splurge huge amounts on a totally mass market valueless item. Research vendors, but first and foremost – your partner’s taste.

Daphne Singer

As a Millennial/Gen Z jewelry designer, I can say from my personal experiences as well as those of my friends that it’s not necessarily that people don’t like flashy gemstone or diamond jewelry, but that we can’t afford it, and would rather turn to simpler jewelry that barely meets the criteria of “fine” rather than buying obnoxious costume jewelry. Sterling silver or low carat gold, minimal usage of large/flashy gemstones, and costume jewelry that LOOKS like it cost 500 dollars rather than 5000 are preferred. Younger people also research a lot of purchases before buying, whether it’s a 20 dollar product or a 2000 dollar one, since quality is an important factor to us. This may not be the case for the .0001%, but they don’t represent the entire market as a whole. Of course, five to ten years from now this will all likely be different as the pendulum swings back towards the opulence of the eighties and naughts.

TheLawToday

Well said! You design jewelry? You have a website?

Daphne Singer

You can find my products on Etsy at https://www.etsy.com/shop/CrownofLaurelsCo, or on Facebook/Instagram as Crown of Laurels Jewelry. I’m just starting out, and currently only have 3 types of pieces available as I am operating on the barebones budget of a college student. I’m currently sticking with fine silver and 24k gold vermeil, but plan to incorporate solid gold and potentially small (i.e. under 3mm) precious stones like white corundum/sapphire into my yet to be released pieces.

Paul

I agree with you. I am a 65 year old “Millennial”. Came out of college with double digit inflation, interest rates and unemployment in 1974. We wanted experiences, so we traveled and did things we wanted to do. We were the generation of “weed will get you through times of no money better than money will get you through times of no weed”. There was no money for jewelry, in fact who bought “fine jewelry” at 26 years old? As we got older, established, got married, had kids, bought a house, then jewelry came into play.

The biggest difference? We bought houses at high interest rates and as the rates fell, many people refinanced and pulled money out to play. This will never be the case for the “Millennial” generation.

But also bear in mind, Suzy will not want IPhone 15 on her 10th or 15th wedding anniversary. Something special for her will be in order. So why not cultivate your engagement/bridal “Customers” into “Clients” that will return in the future?

Sarah

As an older Millennial in the jewelry business I partially agree with Daphne, but I also agree with Sean and Alo.
“Unique” designs and a “hands-on” selling style focused on educating the customer base is key to selling better goods –as opposed to price-competitive dirt-cheap goods– these days. However, stores are closing for a reason. And yes, every store closing is a unique story. Sometimes business is bad, sometimes a store owner just wants to retire and there is no one capable or willing to put in the work anymore, sometimes the real-estate is worth so much that it makes more sense to liquidate and sell the location. (I am in the SF Bay Area and I know for a fact that a couple of stores have closed just because the owners owned the real-estate and suddenly NOT selling out seems like the worst possible business decision.) And, often, stores are closing because the volume &/or value of sales is down.

Something very few people want to confront when talking about “Millennial” consumers is that an awful lot of Millennials don’t have much money and many will never have much money. They have been economically scarred by a Depression-style Recession & many are never going to personally participate in a 1950s or even a 1980s style economic boom. We now have an extremely bifurcated economy.

In some ways some of the language surrounding Millennials’ “style preferences” reminds me of how my grandmother –who came of age during the Great Depression– talked about fashion. When she was young in the 1930s she strove to attain what she called an “elegant sufficiency” –basically she was trying to be elegant while just about getting by on a $14.50 a week salary. But she didn’t hate high fashion, or fine jewelry, she just couldn’t afford it. By the 1950s she could and it was important to her and her ilk to have a “nice” strand of pearls and a “good” diamond and a “quality” fountain pen.

I think as jewelers we are deluding ourselves if we think the Millennials are going to turn into jewelry buyers the way grandma was. Or the way Baby Boomers were in the ’80s. A truly shocking number of younger Millennials have the kind of student loan debt that they are not going to be able to pay off. An equally shocking number have chosen to go into fields that really aren’t going to pay nearly as well as the jobs their parents’ had. (It is highly doubtful a blogger is going to make as much money as a CPA.) And many seem to be very aware that they aren’t going to benefit from a miraculous economic boom.

I think it is past time as jewelers that we accept that the Millenials as a generation will not be the Baby Boomers 2.0. And that at least half of all American Millenials will not graduate into “nice” diamond buyers and “good” pearl buyers.

I am a Millennial and I have a hard time acknowledging that. It is incredibly sad that so many members of my generation are not going to be able to live the middle-class lives with the occasional splurge that their parents managed to. But… it is the case.

I’m all for personal choice in fashion and even personal choice in anti-fashion. Interestingly there is a very loud verbal push against anyone who dares –or can afford– to display better stones. I do have a nice strand of pearls –and I like to wear my pearl choker– and at least every other time I wear it I get harangued by a contemporary for “dressing like a princess.” For a while it really hurt me… and I stopped wearing my good pearls. And then I decided that I could either bow to the tastes of the rudest members of my age cohort, or go my own way.

It would be nice as jewelers if we could at least tone down some of the anti-jewelry discourse that is fashionable right now. But I seem to recall reading near identical arguments against diamond engagement rings in Salon, the New York Times, the Toronto Star, etc. ever since 2008. And there are still people who want “nice” things or “fabulous” things. But it probably isn’t going to be a big market anymore, or an aspirational market anymore. Thirty plus years ago there were plenty of women who didn’t make much money but nevertheless would get one or two “nice” pieces of jewelry every couple of years. But that aspirational special-occasion customer may not exist in the future. And, as jewelers we should start preparing for that now.

There’s an old PR adage that comes to mind: “If it bleeds, it leads.” That’s how every news medium operates based on what grabs our attention. Don’t blame JCK for “bad news,” in fact, think about thanking them. Look at every “bad news headline” and then look at the wealth of communication under that story. Controversial headlines don’t “bring us down” they actually bring us together. These stories are supported by facts, not souped up sensationalism. Now look at the “good news headlines” and find the community interaction. It’s weak, if it’s there at all. In fact, people sometimes try to find “bad” in the “good” to justify more than a line of commentary. I celebrate any fact filled story that gets us talking as a team.

In some ways some of the language surrounding Millennials’ “style preferences” reminds me of how my grandmother –who came of age during the Great Depression– talked about fashion. When she was young in the 1930s she strove to attain what she called an “elegant sufficiency” –basically she was trying to be elegant while just about getting by on a $14.50 a week salary. But she didn’t hate high fashion, or fine jewelry, she just couldn’t afford it. By the 1950s she could and it was important to her and her ilk to have a “nice” strand of pearls and a “good” diamond and a “quality” fountain pen.

I think as jewelers we are deluding ourselves if we think the Millennials are going to turn into jewelry buyers the way grandma was. Or the way Baby Boomers were in the ’80s. A truly shocking number of younger Millennials have the kind of student loan debt that they are not going to be able to pay off. An equally shocking number have chosen to go into fields that really aren’t going to pay nearly as well as the jobs their parents’ had. (It is highly doubtful a blogger is going to make as much money as a CPA.) And many seem to be very aware that they aren’t going to benefit from a miraculous economic boom.

I think it is past time as jewelers that we accept that the Millenials as a generation will not be the Baby Boomers 2.0. And that at least half of all American Millenials will not graduate into “nice” diamond buyers and “good” pearl buyers.

Sarah

Both Daphne and Paul have good points. As an older Millenial I am probably just a year or two older than Daphne. And I know a lot of my contemporaries don’t “hate” fine jewelry, they just can’t afford it. But when I look at some of the Gen X children of my parents’ friends I don’t necessarily feel particularly hopeful that the economic problems of my generation will solve themselves with age. Paul may have warm memories of being poor, backpacking and smoking weed in the ’70s. But he also has warm memories of the ’90s boom years. Some of my older Gen X acquaintances are cruising into their late forties now and despite “good degrees” from “good schools” are in rather precarious financial positions. Interest rates are at rock bottom levels and they still struggle to make the mortgage payments, what retirement planning they have often consists of expecting relatives to die and leave them money. It isn’t really a failure to launch situation as much as it is a failure to sail in foul weather situation.

It isn’t bad news for retail if a bunch of people are semi-broke when they are twenty-something. It is bad news if those people are still semi-broke at forty-something. And I fear that that will be the case for many members of my generation.